Senior executives in the Egyptian insurance market have emphasised that the insurance industry needs a catalyst which can lead the transformation of the industry, just as the central bank did in 2004 in restructuring and developing the banking sector.
These comments were made at the 6th CEO Conference held in Cairo last week, according to a report by Al Mal.
Mr Mohamed Moustafa Abdelrasoul, managing director of Arab Orient Takaful Insurance, expressed the hope that the Insurance Federation of Egypt (IFE) would develop the industry and work to increase insurance awareness, pointing out that the Federation’s decisions should be mandatory and for the IFE to have some degree of authority over companies in the sector. Currently, the IFE plays a consultative role.
Echoing Mr Abdelrasoul's view, Mr Ahmed Khalifa, managing director and CEO of Sarwa Insurance, stressed the necessity for decisions of the technical committees of the IFE to be binding on insurance companies because the panels undertake professional tasks that improve market practices.
Giving his views, Dr Adel Mounir, secretary general of the Federation of Afro-Asian Insurers & Reinsurers (FAIR) said that there are several approaches to take to develop the Egyptian insurance sector such as product design, compensation management, and the use of mobile and digital applications.
He suggested that the IFE take up the role of catalyst for the insurance sector, because it is one of the strongest professional federations and it is mandatory for insurers to be members.
Mr Basel El Hini, chairman and managing director of Misr Insurance Holding Company (MIHC), said that while the role of the Financial Regulatory Authority (FRA) in supervising the insurance sector is good, the industry is awaiting greater and quicker changes along the lines of what took place in the banking sector. He added that it would not be easy to add the role of development catalyst to the functions currently undertaken by the Authority which also oversees other financial services.
He added that insurers should move towards change and development by following the lead of government-owned insurance companies, so as to repeat the success seen in the banking sector.
Mr Reda Fathy Ahmed, chairman & managing director of Mohandes Insurance, said that some customers do not disclose that they have received insurance compensation for losses incurred because they wish to keep the settlements a secret from their creditors. Thus, the perception is cultivated that insurers do not honour claims although insurers do make payments on humanitarian grounds in cases where the risk is not covered by the insurance policy.
He pointed out that the proportion of claims that is not paid in the insurance sector is 3-4%, and that this percentage is used to distort the image of the sector.